TaxTMI 
TaxTMI 
2008 (9) TMI 555
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....T Scanner and held negotiations for the same with the appellant and respondent No. 3, M/s. UB Picker Ltd. It is alleged that on 10-4-1989, the appellant sent its proforma invoice No. PMS/S/CT/001/89 (hereinafter referred to as the 'First Offer') for the supply of a new CT Scanner (Picker Synerview 1200 SX Whole Body Computer Tomography Scanner, 4th Generation Stationary Detector Technology system) including spares and accessories at a price of US$ 1,282,500 (US Dollar one million two hundred eighty two thousand five hundred only). This First Offer was a comprehensive and composite offer and could not be split and/or partly accepted. 5. The relevant terms of the First Offer were, inter alia as follows :- "(a)The system offered was Picker Synerview 1200 SX Whole Body CT Scanner 4th Generation Stationary Detector Technology' consisting of Module A, C, J3, K1, M, Q, 02, B, including spares/Savs System/B.M. Analysis Package/3D Package/Xenon Blood Flow Package/Dynamic Scanning/IOR-II. (b)The total System Price was US$ 1,282,500 (c)The price quoted was CIF Madras; (d)The prices were valid for 90 days; (e)The payment was to be made in US Dollars by irrevocable and confirm....
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.... of by 'ocean freight', which was one of the terms of the Second Quotation. The break-up of the total system price was US$ 560,000 (US Dollar five hundred sixty thousand only) for the system and US$ 10,000 (US Dollar ten thousand only) towards the cost of the shipment 'by Air'. This was duly endorsed by respondent No. 2, on 16/23-1-1990. At the relevant time, respondent No. 2 was the Chairman of the Board of Directors of respondent No. 1. Respondent No. 1 opened an L/C dated 24-2-1990 in the amount of US$ 700,000 (US Dollar seven hundred thousand only). 8. It is alleged that the appellant was surprised to find that the L/C had been opened for a sum of US$ 700,000 (US Dollar seven hundred thousand only) instead of the agreed price of US$ 570,000 (US Dollar five hundred seventy thousand only) and also that respondent No. 1 had referred to the old proforma invoice No. PMS/B/CT/001/89 dated 10-4-1989 instead of the duly accepted Second Quotation, being Quotation No. QR/4896/90 dated 3-1-1990. 9. It is alleged that the said L/C could not have related to the First Offer dated 10-4-1989 as the validity of the same had expired after 90 days of the date of the First Offer without the ....
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....presented to respondent No. 1 about the production and quality of the goods and services and it induced respondent Nos. 1 & 2 into entering into an agreement with them, although they had knowledge that the CT Scanner ordered by respondent No. 1 was not in production. 14. It is alleged that in these circumstances, respondent Nos. 1 & 2 was left with no option but to procure the CT Scanner from Hitachi, Japan. It is also alleged that respondent Nos. 1 & 2 thereby suffered a huge loss of Rs. 32,31,885, which should be paid to them as damages. 15. On the aforesaid complaint, the MRTP Commission issued a notice dated 28-6-1995 to the appellant and respondent Nos. 3 to 5 calling upon them to file a reply. The appellant filed its reply on 6-2-1996 and submitted that no unfair and restrictive trade practice was committed by the appellant and the appellant is not liable to pay any compensation. 16. By the impugned judgment dated 29-11-2005, the MRTP Commission allowed the complaint and has held the appellant guilty of unfair trade practice. The Commission has passed an order restraining the appellant in indulging in the aforesaid alleged restrictive trade practice and directing it ....
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.... of any goods or services; or (ii )a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result, if such purported warranty or guarantee or promise is materially misleading or if there is no reasonable prospect that such warranty, guarantee or promise will be carried out; (ix)materially misleading the public concerning the price at which a product or like products or goods or services, have been, or are, ordinarily sold or provided, and, for this purpose, a representation as to price shall be deemed to refer to the price at which the product or goods or services has or have been sold by sellers or provided by suppliers generally in the relevant market unless it is clearly specified to be the price at which the product has been sold or services have been provided by the person by whom or on whose behalf the representation is made; (x )gives false or misleading facts disparaging the goods, services or trade of another person. Explanation : For the purposes of clause (1), a statement that is - (a )expressed on an article offered or displayed for sale, or on its wrapper or container....
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....uch hoarding or destruction or refusal raises or tends to raise or is intended to raise, the cost of those or other similar goods or services." 20. In this connection it may be mentioned that as originally enacted the MRTP Act, 1969 was made with the object of ensuring that the operation of the economic system does not result in a concentration of economic power to the common detriment, for the control of monopolies, and for the prohibition of monopolistic and restrictive trade practices. 21. There was no provision like section 36A in the original Act. However, it was later felt that there was need for some modification of the Act. In the original Act there was no specific provision for regulating unfair trade practices like misleading advertisements, bargain selling, etc. It was realized that the consumer needs to be protected not only from the effects of restrictive trade practices, but also from practices which are resorted to by certain unscrupulous businessmen who mislead or dupe the consumers. Hence, the MRTP Act was amended in 1984 and the Statement of Objects and Reasons of the amendment has given the reasons as to why this amendment was necessary. 22. The 1984 ame....
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....an amendment is made to an Act, or when a new enactment is made, Heydon's mischief rule is often utilized in interpreting the same. Applying this principle we are of the opinion that section 36A was inserted in the MRTP Act because there was no provision therein for protection of consumers against false or misleading advertisement or other similar unfair trade practices. It is well-known that in a trade suppliers often have a dominant bargaining position, and the bargaining power in the market is often weighed against the consumer. In this situation, it was realized by Parliament in its wisdom when it inserted section 36A that the public must be prevented from being made victims of false representations about the products sold, even though it may have no adverse effect on competition. The purpose of section 36A was to prevent frauds against the consumers who may be falsely induced to buy goods which do not possess the qualities which they are given out to have by advertisement or other representations. 27. Taking the above object of section 36A into account it is obvious that section 36A was never meant to deal with a situation where goods are not sold at all. Section 36A was re....
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.... section 36A of the Monopolies and Restrictive Trade Practices Act, 1969, (hereinafter referred to as 'the 1969 Act') which has been introduced in the Act by way of amendment in 1984 and further amendment in 1991. 2. As was submitted by Mr. A.N. Haksar, learned Senior Advocate for the appellant, the 1969 Act, as originally enacted, lacked definition of the term 'unfair trade practice'. While 'trade practice' was defined in section 2( u) of the original enactment in the following terms : "2. Definitions - In this Act, unless the context otherwise requires,- (a)to (t)****** (u)'trade practice' means any practice relating to the carrying on of any trade, and includes - (i )anything done by any person which controls or affects the price charge by, or the method of trading of, any trader or any class of traders, (ii )A single or isolated action of any person in relation to any trade;" the term 'restrictive trade practice' was also defined in section 2(o) in the following terms : "2. Definitions.-In this Act, unless the context otherwise requires,- (o )'restrictive trade practice' means a trade practice which has, or may have the effect of preventing, distortin....